More hospitals pledge no charges for adverse events

The Massachusetts Hospital Association recently announced that all Massachusetts hospitals are adopting a uniform policy to not charge patients or insurers for certain serious adverse events, including wrong-site surgeries, as defined by the National Quality Forum (NQF). In doing so, Massachusetts becomes only the second state in the nation to take this voluntary action.

Lynn Nicholas, FACHE, president and CEO of the Massachusetts Hospital Association, says the new policy builds on several groundbreaking transparency and quality initiatives. "This policy sends a strong message to patients that their hospital is committed to doing everything possible to eliminate these types of events," she says.

The policy, to be put into effect early this year, will codify long standing safety practices and fortify hospitals' commitment to preventing adverse medical events, Nicholas says. The policy will apply to any of the defined events and any subsequent care needed to manage the event. The hospital community will work collaboratively with an advisory group comprised of hospital members from clinical and financial departments, the physician community, the health insurance companies, and patient-consumer representatives to implement the plan, she says.

The policy initially will cover nine rare but serious adverse events and is based on nationally accepted definitions. This is the initial list:

  • surgery on wrong body part;
  • surgery on wrong patient;
  • wrong surgical procedure;
  • retention of foreign object;
  • medication error injury;
  • incompatible blood-associated injury;
  • air embolism-associated injury;
  • artificial insemination/wrong donor;
  • infant discharged to wrong family.

Nicholas says as hospitals gain experience with the policy, the list will be expanded to include other events.

Under current practice, Nicholas says Massachusetts hospitals disclose the incident and apologize to the patient, as well as reporting the incident to separate programs at the Department of Public Health and the Board of Registration in Medicine. However, bills still are frequently sent to insurers and patients.

"Obviously, the ultimate goal is to reduce these errors," Nicholas says. "But as human error is inevitable, we'll attempt to learn from our mistakes, acknowledge the profound effect they have on patients and, ultimately, expand the list of serious adverse events that should not occur and for which hospitals should not charge."

John Banja, PhD, assistant director for health sciences and clinical ethics at Emory University in Atlanta, says the Massachusetts policy is the right thing to do, but he notes that hospitals may have questions as the list of errors grows. "Currently, the nine error categories that the Massachusetts Hospital Association has identified are all slam-dunk errors. Things will start getting epistemologically interesting when the list is expanded and we start being confronted with provocative questions like, 'Was there really an error here?'" Banja says. "This forces the question of how you define errors. Then there will be the issue of, 'Did the error cause harm? How much harm?"

The policy will force hospitals and health professionals to drill down to a finer understanding of error and its effects, Banja says. The effort is worthwhile, he says, because the financial impact on patients can be significant after medical errors.

Massachusetts follows Minnesota, the first state to formalize such a policy. On Sep. 18, 2007, Minnesota Gov. Tim Pawlenty announced a statewide billing policy for care made necessary by preventable medical errors, such as wrong-site surgeries and serious medication errors. Under the agreement, hospitals in Minnesota will not bill insurance companies and others for any of 27 types of reported adverse health events. The adverse health events are defined by the NQF. (Editor's note: For more on the NQF's adverse event definitions, see the group's web site at www.qualityforum.org. Enter "serious reportable events in healthcare 2006" in the search box, and click on "Serious Reportable Events in Healthcare 2006 Update — Reports.") The Governor's Health Care Cabinet endorsed the plan created by the Minnesota Hospital Association and the Minnesota Council of Health Plans.

The policy built on past experience in which Minnesota hospitals individually recognized the need for a proactive billing policy. HealthPartners, a Minnesota-based insurer, was at the forefront of the issue in enacting a 2005 policy of not paying for care provided to their enrollees when it included certain serious preventable medical errors. Over the last few years, Blue Cross-Blue Shield worked closely with the hospital association to create the framework for this statewide policy.

Bruce J. Rueben, president of the Minnesota Hospital Association, says the policy is working well in his state and has not caused any problems so far. "Everything is going along smoothly because it was not a radical idea when we formalized the policy. We had been building toward this with individual hospitals," he says. "Now we are working with the health plans to pull out the care that is made necessary by an adverse event, because it can still get into the billing cycle. Occasionally, you don't know you had an adverse event until the bills have already gone out."

The policy has not had a financial impact on Minnesota hospitals because the events were rare, Rueben says. Most hospitals nationwide already waive the charges when responding to an adverse event, but usually on an informal basis and only when the right people intervene, Reuben says. A formal policy helps ensure that the charges are waived more consistently. "

The idea that there is service that won't be billed is of no consequence financially, in the grand scheme of things. When these things happen, the last thing that matters is what you bill for," he says. "So there's no reason not to do what's right. More than anything, it's just a matter of sorting through the complex billing process to take those charges out of the system."

Associations representing Washington state hospitals, physicians, and surgery centers have volunteered not to bill for care related to 28 specific serious adverse events. "This is current practice in most of our hospitals, and fortunately, adverse events are very rare" said Leo Greenawalt, president of the Washington State Hospital Association, which adopted the resolution along with the Washington State Medical Association and Washington Ambulatory Surgery Center Association (WASCA). "With the governor's help, all of the state's health care providers are coming together with a unified plan. It is simply what patients expect."

Members of WASCA think that it is important to support this issue, says Terry Hawes, vice president of National Surgical Care and president of the association. "We don't think that not charging for 'never events' will impact our industry as we are very proud of our track record," Haws says.